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Topic 9- Exceptions Trusts for Charitable Purposes (b) The Advancement of…
Topic 9- Exceptions
Trusts for Charitable Purposes
Charities Act 2009
s2(1):
For a gift to be charitable it must be 'for charitable purposes'
s3(1):
For the purposes of this Act each of the following shall, subject to ss2 be a charitable purpose
a) The prevention or relief of poverty
b) The advancement of education
c) The advancement of religion
d) any other purpose that is of benefit to the community
s3(2)
A purpose shall not be a charitable purpose unless it is of public benefit
Benefits
If charitable trust fails, court may invoke cy-pres jurisdicion and apply trust property as near as possible to the charitable purpose specified by settlor
A charitable trust enjoys exemptions from certain taxes
Development
Historically
Equity recognised four purposes as prima facie charitable
The relief of poverty
The advancement of education
3.The advancement of religion
Any other purpose beneficial to the community
Before a trust for such purpose would have been accorded charitable status, the court, as a general rule
would have to be satisfied the trust conferred a benefit on the public
Statute of Frauds Charitable Uses (Ireland) 1634
Certain purposes were identified as prima facie charitable in the preamble
Re Worth Library
Keane J considered preamble
The list of charitable purposes in the relevant statute is not exhaustive and a trust may still be charitable if it is within 'its spirt and intendment'
Commissioners for Special Purposes of Income Tax v Pemsel
: Charity in its legal senes comprises four principle divisors
relief of proverty
advancement of religious
advancement of education
for other purposes beneficial to the community
Less stringent view?
National Anti-Vivisection Society v Inland Revenue
: If the purpose is within one of the heads of charity forming the first three classes, the court will easily conclude that it is a charitable purpose
When a purpose appears broadly to fall within one of the familiar categories of charity, the court wil assume it is to be for the benefit of the community and therefore, charitable, unless the contrary is shown
Approved in
Re Worth Library
: Keane J
The court leans in favour of charities and consequently will prefer a construction which gives effect to the testator's desire to benefit a stated object rather than one which leads to a failure of the bequest
a) The Prevention or Relief of Poverty or Economic Hardship
Prior to 2009 Act
The relief of poverty was a purpose that was recognised as prima facie charitable
This purpose appears to have been broadened by 2009 Act:
Prevention or relief of poverty or economic hardship
Courts may continue to look at pre-2009 case law in deciding what 'poverty' means
Re Gardon
:
Facts: Concerned a gift for provision of a temporary rsidence for 'ladies of limited means'
Held: There are degrees of poverty less acute than abject poverty or destitution
Gift upheld as charitable
Re Coulthurst
:
Facts: Concerned trust for teh benefit of the widows and children of deceased officers of a bank, who by reason of their financial circumstances, were the most deserving
Held: Trust for relief of poverty
It is quite clearly established
poverty does not mean destitution
It is a word of wide and somewhat indefinite import
Paraphrased as meaning 'persons who have to 'go short' in the ordinary acceptation of that term, due regard being had to their status in life and so forth'
Brett v AG
:
Facts: Concerned trust for 'such poor persons on the County of M as the executor shall select and consider worthy of assistance'
Held: The fact hat discretion is conferred on a trustee to select those who will benefit does not affect the charitable nature of the gift
Baddeley v IRC:
Authority for the proposition that amusing the poor is not necessarily the same as relieving their poverty
Relief seems to connote need of some sort, not merely an amusement however health it is
Re Sanders' Will Trust
Facts: Bequest to provide housing for the 'working classes' and their families resident in a certain district
Held: Not for the relief of poverty and therefore not charitable
Important modern authority
Re Segelman Deceased:
Facts: Concerned a gift to the poor and needy members of a class of testator's relatives
Held: Accepted gift was charitable
As being a gift for the relief of poverty
Evidence established that 'most members of the class are comfortably well off, in the sense that they are able to meet their day-to-day expenses out of income, but not affluent'
like many others in similar cirucmstances, they need a helping hand from time to time in order to overcome an unforeseen crisis'
Clearly demonstrates a
liberal approach
being taken to meaning of poverty
Note: All in all, it may be that poverty, as interpreted in the case law, encompassed 'mere' economic hardship, so the 2009 Act may no have effected any substantial change
b) The Advancement of Education
Prior to 2009 Act
The advancement of education was a purpose that was recognised as being prima facie charitable
This remains so in wake of enactment
Court will continue to look to pre-2009 Act case law in deciding what 'education' means
Re Shaw
Facts: Concerned direction in the will of George Bernard Shaw that the residue of his estate be applied to research into the advantages of reforming the alphabet
Held: Trust not charitable
If the object be merely the increase of knowledge that is not in itself a charitable object unless it be combined with teaching or education
Re Hopkins' Will Trust
Facts: concerned a gift to a society that was devoted to locating the Bacon Shakespeare papers
Held: Charitable
in order to be charitable, research must either be of educational value to the researcher or mus be directed as to lead to something which will pass into the store of educational material orso as to improve the sum of communicable knowledge in an area which education may cover
Note: UK court taking broader approach
Re the Trust of the Worth Library
: Keane J expressed a preference for the views of Wilberforce J
Facts: Concerned a gift of a library to Dr Stevens' Hospital, Dublin
In his will, Dr Edward Worth stipulated only physician, chaplain and surgeon were to have use of the library
Held: Education has been given a broad meaning so as to encompass gifts for the establishment of theatres, art galleries and museums and the promotion of literature and music
Held: Given the insignificant proportion of the library devoted to medicine and surgery would involve some straining of the concept of education even beyond the liberal limits of modern decisions
Section 3(11)(k) 2009 Act
Identifies 'the advancement of the arts, culture, heritage or sciences' as being a 'purpose that is of benefit to the community'
Accordingly gifts for advancement of community may no longer include gifts for the establishment of theatres, art galleries and museums and the promotion of literature and music
Gifts to advance physical education
Re Marriette
:
Facts: Concered a gift to be used for purpose of
Creating squash courts at Eton
Athletic prizes
Held: Charitable as being gift for advancement of education
IRC v McMullen
:
Facts: Concerned trust 'to orgainse or provide or assist in the organisation or provision of facilities which will enable and encourage pupils at schools and universities in UK to lay association football and other game sports
Held: Charitable trust for advancement of education
DEMONSTRATE: Gift+ to advance physical education + in an educational institution= charitable as being gift/ trust for advancement of education
Gifts to promote self-help activities
Magee v AG:
Gift to promote activites in a local community hall that primarily consisted of running self-help groups
Held: charitable as being a gift for the advancement of education
Gifts to professional bodies
Miley v AG
: Irish court of appeal considered whether or not a gift of land to the Royal College of Surgeons in Ireland was a gift for 'charitable purposes'
Held: College had two main purposes
he promotion of the science of srugery
The regulation of the profession and the promotion of the interests of those practicing it
Held; Since second object was not charitable the gift to the college could not be one for 'charitable uses'
Regulatory purpose
Royal College of Surgeons of England v National Provincial Bank
UK CASE LAW
Facts: Gift to Royal College of Surgeons of England
Two objects
The promotion and encouragement of the study and practice of surgery
The professional protection of its members
Held: Second object
ancilliary
to the first- did not alter charitable status
Section 49(1) Charities Act 1961: Enacts that if the purposes of a gift include charitable and non-charitable objects- gift constured so as to exclude the non-charitable objects
Miley type gifts would now be applied solely in furtherance of charitable objects of professional body
c) The Advancement of Religion
Prior to enactment of 2009 Act
The advancement of religion was a purpose that was recognised as prima facie charitable
Remains so in wake of 2009 Act
Courts may continue to look at pre-2009 case law so far as deciding what 'religion' and such gifts are
Quinn's Supermarket v AG
: Walsh J observed that although A44 of the Constitution refers to the Christian nature of the state 'religion' is not confined to Christian faiths
1. Gifts for religious purposes
Arnott v Arnott
: A gift for religious purposes and not more will be construed by the court as confined to such religious purposes as are in their nature charitable
2. Gifts to the holders of ecclesiastical office
Donnellan v O'Neill
: A bequest to a cardinal absolutely for his own use and benefit
Held: Not charitable
Gibson v Representative Church Body
: Bequest to the chaplain of Rotunda Chapel at time of testatrix's death and his successors
Held; charitable
3. Gifts for the celebration of masses
Section 45(2) Charities Act 1961
: enacted a gift for celebration of masses was a gift for the advancement of religion
HOWEVER- repealed by s11 and Schedule 2 2009 Act
s45(1): had set out in determining whether or not gift for purpose of advancement of religion was valid charitable gift
Conclusively presumed that purpose includes a public benefit
Repeal- means no longer conclusively presumed
Rather- s3(4) 2009 Act: Presumed unless contrary is proven that the gift for the advancement of religion is for the public benefit
Therefore
s45(2)
: Gift for celebration of masses= presumed gift for advancement is for public benefit unless contrary proven
If charities Regulatory authority wants to rule a gift for advancement of religion is not of public benefit- must get consent of AG
s3(10) 2009 Act: identifies a gift that is no a gift for the advancement of religion
A gift is not a gift for advancement of religion if it is made to or for the benefit of an orgnaisation or cult
a) principle object of which is making of profit
b) that employs oppressive psychological manipulation